Ann, you are in a very active area. Don’t know why you haven’t seen it on your section yet! Don’t blame you for turning down $700, even in this economy.
Many of the wells nearest us are almost 5 years old. The company that drilled them - N, NE, E of us - was a real pioneer in this area. There was nothing here at the time. The wells were mostly only so-so; at least one was a dud because of mistakes made. But CWEI has started drilling in other sections south of us in the last year or two and production has been much better. We’re still sort of in the wild west though.
I think that the State only audits when it owns minerals. Even then, the resulting settlement, if any, are not public.
As to your royalties, the answer depends on the wording in the royalty clause of your lease. If your gas price refers to the "wellhead price" or to value "at the wellhead", then you will be charged for costs such as transportation and processing. Texas courts have held the value at the well or wellhead is calculated based on the ultimate sales price at the sales point and then reduced by all the costs back to the well. To avoid being charged these costs, royalty clause must not include a reference such as "market value at the well." See Heritage Resources Inc. vs Nationsbank 939 S.W. 2d 118 (1996), Texas Supreme Court.
Section 24, Block 6, H&GN, Reeves County - Endeavor Energy Resources LP completed Ayers Unit “24” 1H well in December 2011. Well is still producing. API 42-389-32686; RRC Lease ID 08-41978. Original permit listed 640 acres, but that may not be the ending acreage.
Also the lease also includes another paragraph which states that any post production expenses of the lessee or a third-party are to be added back to determine the value and that those provisions are fully enforceable and not “surplusage”
There are discounts in the field. Unfortunately as royalty owners we have to live with the fact that Brent cued is around $13 higher than WTI. On top of that are the discounts that Perian/Delaware Basin producers are subject to, much of which is because of the onshore, domestic glut! Sux!
Liz M. - We are leased with Clayton Williams in Blk.13 Sect.219 (A-307) until July 2015. We’re approx. 4 miles South/Southeast of you. We were contacted by CWEI December 2014 wanting us to sign a 3 year extension for $300/ac. I declined the offer because at the time they called, we still had 8 months left on the lease. It’s a gamble but we’re hoping for better offers from either Clayton or someone else.
Stephen, you’ve got some pipelines located pretty near you and they are CW pipelines. So it sounds like they may have plans.
We’ve had drilling right next to us for several years by a variety of companies. (The old wells keep selling and new ones drilled.) It’s been frustrating for us too. However! In those years, the companies have learned soooo much and production is so much better now that I’m happy we weren’t drilled earlier. And CW has been building pipelines in our direction so that bodes well too. We’re being patient and hoping that we’ll at least be re-leased next year.
As Liz stated your minerals are in a good productive area of Reeves County. A well just south of your Section 38(API 389-33658)Completion Report was 430 BOPD/462,000MCF per day.
A well to the N/W of your Section 38 in Section 253/Blk 13(API 389-34064) Link to Completion Report:
Liz, I see that you’re pretty much South of Pecos. The wells right by you should be encouraging.
I’m SE of Pecos, in the Toyah Lake bed, by HWY 285. Sec. 26, Blk. C-7 PSL(A-5261). My CWEI lease expires in Oct. this year. They called a month or two ago and offered me $700/ac to extend the lease and I told them I wouldn’t consider it for that price.
Clint I think your map shows T7. We are looking for open or soon expiring acreage in and surrounding area of Block 13. We would certainly like to take a look at the block 52. Is your block 52 in T7 or T8? Feel free to contact me directly Robin
Thanks Mark for pointing out the Township thingy in Reeves County. Sure is a lot of difference in activity in Township 7 and Township 8. Township 8 is not nearly as active.
does anybody know why on my royalty statements from resolute, the prices for all the commodities are significantly lower than the lowest published price for the month. Our lease is for a wellhead price to a disinterested purchaser, without bearing any of the expenses.
I suspect that they are selling to someone that is calculating those expenses into the price paid - which doesn’t effect resolute because of their hedge position for the products. it just makes magt.'s hedger look better.
If they are selling to someone at the discounted price will the state challenge it?
Thanks Tennis ~ the lease does say for the oil and liquid hydrocarbons " 25% of the net proceeds of the sale or the market value thereof, whichever is higher, all free of all cost and expenses"
I’ll check out the case to see how it reads in relation to our terms
I’ve been approached to buy my surface rights in Reeves Co. Sec.2, Blk 55. & offered $100/acre. Does anyone know what surface rights sell for in that area?
If your land is state classified, it would ceretainly interfere with your mineral rights. The state of Texas owns the minerals on my land and I own the surface. But, the state is generous enough to split the production with me if there is any production (1/2 is the amout we share). Hope this helps you some. Not to interfere with Mark, just adding my info for you…
